H&R Block Subprime Lending Division Loses $676.8 Million

H&R Block’s subprime mortgage lending arm has reported a quarterly loss of $676.8 million, dragging down the entire company. In all, all of H&R Block lost $85.5 million in Q1. From BusinessWeek:

The company reported losing $85.5 million, or 26 cents per share, during the February-April period, which is when the nation’s largest tax preparer sees the majority of its revenue. By comparison, the company earned $587.5 million, or $1.79, during the same period a year ago.

H&R Block says it will sell its subprime lending operation to a private equity firm.

Yikes. Other than the subprime lending, H&R Block is doing well. The rest of the company earned $591.2 million. —MEGHANN MARCO

H&R Block reports $85.5 million 4Q loss [BusinessWeek]
(Photo: Maulleigh)

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  1. Dinion says:

    Does anyone at these lending companies ever consider that if they just kept the payments affordable for the poor people that they are trying to rob, that the majority of these people, who are more than happy to keep paying every last cent they can afford will continue to pay. Instead as soon as they have an excuse the lending companies jack up the rates and make it impossible for a person living from paycheck to paycheck to keep up with their payments, it’s no wonder that they quit paying.

  2. Crazytree says:
  3. banned says:

    I suspect this was an intentional tax write-off and maybe we shouldn’t sound concerned. They likely planned to get rid of that arm long ago so held on awhile and accumulated some tax credits. I don’t believe for one second that a company like that can have a division lose that much money and not be scrapped by Jan 15 if it was not intentional.

  4. olderbudwizer says:

    Finally, those scummers at Option One get their turn at going under. I had to go through bankruptcy in part because of those unforgiving Californians. Oh, they were all too nice and quick to offer me a forbearance agreement to pay 1.7 times my normal monthly payment to help me out of my problem. But when I asked them to modify the loan and move the past due to the end of the loan – within their prerogatives to do so – they acted like they never heard from me!

  5. Crazytree says:

    @rocnrule: Scrapped how? This is not a manufacturing company that could just sell its assets to some third-party scavenger.

    They’re stuck with loans that are beyond worthless… they’re a huge liability. Plus if they’re anything like the other subprime lenders, Fannie Mae, Freddie Mac, Ginnie Mae, et al. have made them TAKE BACK their shitty loans.

    That’s gotta sting!

  6. Trai_Dep says:

    It boggles my mind that well paid executives of presumably smart companies could buy into super high risk loans when two years ago, everyone I know was predicting that this would happen…